Radical Transparency and Structural Reform: Rebuilding Trust in Public Procurement

Restoring Public Trust Through Radical Transparency in Contracting

In the pursuit of an orderly and prosperous society, trust acts as the essential lubricant. However, when it comes to public contracting, this lubricant in many nations, including Ghana, has been severely depleted. It is fundamentally impossible to build a high-trust society when the primary mechanism through which the state allocates and spends public funds remains opaque, discretionary, and inherently vulnerable to abuse. Therefore, the second critical step a government must take to restore public confidence is to embrace radical transparency in all public contracting processes.

The daily revelations of abuses and the prevalence of uncompleted projects starkly illustrate the failure of the current system. These issues raise serious questions about the stewardship of public authority. At its core, the argument for transparency is simple: public procurement represents the critical interface where the public purse meets private actors. If this interface is shielded from public scrutiny, suspicion becomes rational, and corruption becomes profitable. This is not mere theory; it is a reality documented in countless studies and scandal after scandal.

Ghana’s Systemic Procurement Failures: Evidence and Economic Impact

Research consistently highlights that corruption in Ghana’s construction and infrastructure sector inflates contract values by an alarming 20% to 30%. In fiscal terms, this represents an enormous drain on national resources. The Ghana Anti-Corruption Coalition estimates that procurement-related corruption siphons nearly three billion dollars from the national economy annually. With procurement accounting for 15% to 18% of the Gross Domestic Product (GDP), this leakage is not a marginal anomaly but a structural feature of the political economy. When such vast sums evaporate through opaque deals, the public inevitably concludes that the state is an untrustworthy steward of collective resources.

Recent contracting failures underscore this pattern. The SML revenue assurance contract with the Ghana Revenue Authority, valued at hundreds of millions of dollars, was awarded without a competitive tender, despite the contractor’s lack of a verifiable track record. Conflicts of interest emerged, and claims of billions saved were found to lack substantiation. Similarly, the Ministry of Education’s free Wi-Fi project saw its commitment balloon from GHS 84 million to over GHS 430 million paid, even as 97% of surveyed schools reported poor or non-existent service. Both cases were facilitated by sole-sourcing and sustained by opaque contracting, with the public ultimately bearing the cost.

The defence procurement domain offers similar warning signals. Transparency International’s Defence Integrity Index scored Ghana 20 out of 100 in procurement risk, describing the ecosystem as highly vulnerable to secrecy, manipulation, and political interference. Critical data, such as supplier names, contract values, and beneficial ownership, are frequently unavailable. When citizens are unable to ascertain how their money is being spent, trust erodes, paving the way for a rumour-driven economy.

These issues are not marginal flaws; they are systemic. Therefore, the required fix must be structural, not merely cosmetic.

Abolishing and Dismantling the Current PPA Model

Ghana’s procurement system continues to grapple with fundamental weaknesses that undermine value-for-money and public trust. Research indicates widespread non-compliance with procurement laws, driven significantly by political interference, weak monitoring, and selective enforcement. A survey of Ghanaian practitioners found that political interference, incompetence, and inadequate monitoring were statistically significant predictors of non-compliance with procurement regulations.

Procurement in Ghana accounts for approximately 14-18% of GDP and up to 20% of government expenditure. Given such a substantial portion of the public budget flows through procurement channels, institutional integrity is paramount. Yet, evidence suggests that the Public Procurement Authority’s (PPA) current structure is insufficient to guarantee this integrity.

The PPA, established under the Public Procurement Act, 2003 (Act 663) (as amended), was intended to regulate and oversee procurement. However, multiple studies document that the PPA often functions as a conduit for preferential sourcing and political directives rather than a neutral evaluator. One investigation, for example, concluded that “successive governments used infractions committed in procurement process to punish heads of entities appointed by previous regimes whilst the same law is loosely applied to the heads of entities appointed by governments in power.” This highlights that procurement failure in Ghana is not solely a matter of individual wrongdoing but fundamentally an institutional design flaw.

Under these conditions, a mere reform of the PPA board model will not suffice. The existing board-and-CEO governance model is susceptible to capture, politicisation, and excessive discretion—precisely the problems the procurement system should be designed to neutralise. Ghana requires a decisive structural change: either abolish or absorb the PPA board model and replace it with a professional, independent, technocratic evaluation unit.

A New Model: Placing Procurement Oversight within the NDPC

Housing a dedicated procurement oversight unit within the National Development Planning Commission (NDPC) presents a sensible and strategic solution:

• The NDPC is already mandated to coordinate national development planning; integrating procurement technical capacity within it would align procurement with strategic policy rather than ad-hoc deals.
• A technical unit staffed by economists, engineers, auditors, and procurement specialists could objectively evaluate bids, validate options, assess value-for-money, and issue recommendations. This would effectively eliminate the political board layer that currently introduces discretion and delays.
• Operating without a board or a single CEO, such a unit would adhere to transparent rules, utilise rotating expert panels, and publish evaluations, thereby limiting opportunities for capture and enhancing predictability—a crucial element for building trust.

Why Structural Change Prevents Fraud and Builds Trust

This proposed structural change offers several critical advantages:

• By removing discretionary boards and politically-appointed CEOs, the primary conduit for preferential sourcing is eliminated. Empirical data consistently point to “political interference” as a key factor reducing compliance in procurement.
• A professional unit would rigorously enforce transparent processes, including open Requests for Proposals (RFPs), published evaluations, and open contract awards, directly addressing the compliance gaps identified in literature.
• When procurement is strategically aligned with national planning rather than individual ministerial expediency, it transforms into a powerful instrument for development. This alignment significantly reduces opportunities for single-firm favouritism or political deal-making.

Studies of Ghana’s procurement regime confirm that compliance remains weak largely because “officials in charge of public procurement flout the rules and regulations with impunity.” Another study identified implementation challenges within procurement committees, citing “political interference, unqualified staff, lack of monitoring” as key obstacles in the Ashanti Region. The fact that procurement constitutes 14-18% of GDP underscores the immense risk posed by weak oversight.

The PPA board model has evidently failed to deliver the oversight, independence, and transparency that Ghana’s procurement system desperately needs. It has become a filter not for rigorous evaluation but for preferential sourcing and implicit political deals. The structural data—widespread non-compliance, political interference, and weak monitoring—support this diagnosis.

Ghana must undertake decisive institutional reform: embed procurement evaluation inside the NDPC as a technocratic unit, abolish or absorb the PPA board model, and remove the veneer of political discretion. Only by doing so can procurement become predictable, transparent, and credible, allowing public trust to genuinely accumulate.

Global Best Practices: How Trusted Countries Prevent Procurement Fraud

While Ghana’s procurement system suffers from leaks, the world’s most effective systems are virtually watertight. They don’t rely on moral exhortation or patriotic appeals; instead, they depend on robust institutional design. Fraud prevention is not achieved by merely hoping officials are honest, but by making dishonesty unprofitable, easily detectable, and institutionally impossible to conceal.

Across the globe, three clusters of countries consistently demonstrate low contracting fraud and high public trust: the Nordic economies (Denmark, Sweden, Finland, Norway), advanced East Asian states (Singapore, South Korea, Japan), and top-performing Anglophone systems (New Zealand, Australia). While their styles may vary, their underlying structures are strikingly similar.

1. Real-Time E-Procurement Platforms

• Countries like South Korea (KONEPS), Chile (ChileCompra), and Portugal (BASE) operate fully integrated digital procurement systems.
• Every tender is advertised centrally, every bid submitted through the same platform, and every contract published automatically.
• Invoices and payments are digitally tied to the contract, and historical data is publicly searchable.
• South Korea’s platform, for instance, processes over 70% of national public spending and reduced procurement costs by more than 10% within years. Fraud declined because the system eliminated human discretion at the most vulnerable points.
• In contrast to low-trust societies where transactions vanish into administrative shadows, high-trust countries abolish these shadows.

2. Vendor Registries with Strict Eligibility Screening

• New Zealand, Singapore, and Denmark require all firms seeking government contracts to register centrally.
• They must disclose beneficial ownership, provide audited financials and tax compliance records, and demonstrate technical capacity and past performance.
• This ensures that unqualified firms and shell companies are barred from entering the procurement space from the outset. Fraud is prevented not at the contract stage, but by strictly controlling eligibility. These countries effectively close the front door to bad actors.
• This aligns with the proposal to restrict contracting to firms with proven capacity (OMEs), reflecting international best practice.

3. Publication of All Contracting Data

• The most trusted governments publish everything by default.
• In Sweden, Norway, and Finland, all bids, bid amounts, evaluation reports, and awarded contracts are publicly posted, allowing journalists, civil-society groups, and competitors to monitor the system.
• Estonia and Denmark extend this to require the publication of renewals, amendments, and price changes.
• Such a level of scrutiny makes fraud collapse. It becomes impossible to inflate invoices or file repeat claims when the entire country can publicly compare contract versions. Transparency is not an ethical aspiration in these countries; it is the fundamental operating system.

4. No Discretionary Sole-Sourcing

• In Denmark, New Zealand, Singapore, and Japan, sole-sourcing is permitted only under strict, verifiable conditions: for instance, when only one supplier exists globally, for national security exceptions, or in genuine emergencies.
• Even in these rare cases, the justifications must be publicly published. In many low-trust countries, sole-sourcing is the single easiest gateway for graft. In high-trust countries, it is a narrow exception that must be publicly defended.
• Abolishing sole-sourcing as a discretionary practice is aligned with global norms.

5. Independent Technical Evaluation Bodies, Not Political Boards

• In South Korea, Japan, and New Zealand, evaluation committees comprise rotating technocrats selected for their expertise, not political allegiance.
• No single individual has the authority to approve a contract.
• In Singapore, procurement officers undergo mandatory professional certification, and procurement integrity is directly linked to civil-service performance metrics.

6. Automatic Digital Cross-Checks to Prevent Repeat Claims

• Low-fraud systems employ digital logic to prevent fraud before it occurs.
• Invoices cannot be submitted unless tied to an existing contract ID; payments cannot be made without digital confirmation of delivery.
• Duplicate invoices are automatically flagged, and contract ceiling amounts cannot be exceeded without triggering an immediate review.
• South Korea’s KONEPS and Estonia’s X-Road integrate customs, tax, company registries, and procurement records to preempt fraudulent claims before any money changes hands.
• These countries do not merely aim to catch fraud; they design systems where fraud simply cannot enter.

The lesson for Ghana is not cultural, but structural. These exemplar countries with low procurement fraud consistently execute five key actions that Ghana has yet to implement consistently:

• Publish everything.
• Digitise everything.
• Professionalise evaluation.
• Restrict eligibility.
• Remove discretion.

High-trust societies did not become so by having inherently “better” citizens. They engineered institutions that made transparency non-negotiable and concealment impossible. Ghana can achieve the same, provided there is a fundamental understanding that trust is never simply granted; it must be deliberately engineered. And nowhere is this engineering more critical than in the realm of government contracting.

~ Hene Aku Kwapong, CDD Ghana Fellow. Former SVP & Treasurer of the New York Economic Development Corporation.